The income elasticity of real money demand d. 3/4
Increase in real money demand = Increase in nominal money demand - Increase in inflation = 4% - 1% = 3%
Income elasticity of real money demand = % increase in real money demand / % increase in real income
= 3% / 4%
= 3/4
Income elasticity of demand is a monetary measure of how responsive the amount of demand for a very good or provider is to trade-in earnings. The formulation for calculating earnings elasticity of demand is the percentage change in quantity demanded divided by using the percent change in earnings.
In economics, the profits elasticity of call for is the responsivenesses of the quantity demanded an amazing to an alternate in patron profits. It is measured because of the ratio of the share exchange in the amount demanded to the proportion exchange in profits.
If the earnings elasticity of call for is more than 1, the best or carrier is taken into consideration a luxury and profits elastic. An amazing provider that has an earnings elasticity of call for between zero and 1 is considered an ordinary correct and income inelastic.
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In an open economy, national saving equals to domestic investment and net capital outflow
Explanation:
In an open economy national saving as considered or calculated an equal to the domestic investment and net capital outflow.
The savings saved by the households are generally deposited in the the banks accounts and banks use this amount to give loans to the business organisation and they make money from these loans.
Apart from this, countries also invests in the other foreign countries which is also considered as domestic (national) saving.
Answer:
$20.29
Explanation:
The computation of the today share price is shown below:
= Next year dividend ÷ (Required rate of return - growth rate)
where,
Next year dividend
= $2.20 + $2.20 × 3.75%
= $2.20 + 0.0825
= $2.2825
The other items values would remain the same
So, the today price would be
= $2.2825 ÷ (15% - 3.75%)
= $2.2825 ÷ 11.25%
= $20.29
Dollar cost averaging is an investment technique which can make a person wealthy in the long run. In this technique, you will buy a particular stock constantly and regularly, regardless of the price. This will add-up and without noticing, you have acquired more than you'd imagine. On the other hand, Ten Percent Solution, you invest 10% of your earnings in a long-term investment, and is done on a regular basis.
